In general, the following terms used in PortfolioStep™ are those recommended in the Glossary of the Project Management Institute's The Standard for Portfolio Management, 2006, Project Management Institute, Inc., PA. The terms shown with a star are either additional to those terms or are at some variance with the wording in the Project Management Institute's standard. Such modifications are necessary to satisfy the PortfolioStep methodology. Note that the use of the word "Portfolio" in each case implies a portfolio of projects and "Other Work".

*Architecture: The way in which parts or constituents are related in an organized whole.

*Authorization: The process of approving, funding, and communicating the authorizations for initiating "Work" on a PortfolioStep portfolio component.

*Balance Point: An Executive decision on the allocation of resources between competing demands within a portfolio, such as between Operations, Projects, Other Work, and so on. See also Portfolio Balancing.

*Benefit: An outcome of change that is perceived as beneficial by a stakeholder.

*Benefits Realization Management (BRM): The process of organizing and managing, so that potential benefits arising from investments in change are actually achieved.

*Business Benefits: See Business Value.

*Business Case: A key document in the early life of a project or program that describes the reasons and the justification for its undertaking based on its estimated costs, the risks involved and the expected future business benefits and value. It provides the basis for selection and authorization of further expenditure of resources.

*Business Plan: A narrative description of how the organization plans to achieve its stated objectives, typically for the ensuing year.

*Business Planning Process: The development of a Business Plan through the following typical steps: idea generation; a scan of the working environment; justification and analysis; preparation of a more detailed action plan; preparation and approval of the Business Plan document; and review, evaluation and control.

*Business Unit: An entire business, or a relatively autonomous division of an entire business containing the necessary organizational components to operate as a profit or cost center.

*Business Value: An informal term that represents all forms of business benefits and value that ensure the long-run health and wellbeing of an organization. It may include such current or potential value components as: shareholder value; customer value; employee value; partner value; supplier value; managerial value; societal value; and so on.

*Capacity: The resources (human resources, financial, physical assets) that an organization puts at the disposal of portfolio management to select, fund, and execute the PortfolioStep portfolio components.

Categorization: The process of grouping potential components into categories to facilitate further decision-making.

Category: A predetermined key description used to group potential and authorized components to facilitate further decision-making. Categories usually link their components with a common set of strategic goals.

*Class: A document label that represents the progress of a portfolio component through the portfolio life cycle, e.g. Value Proposition; Business Case; Project Charter; Execution Performance Report; or similar documentation.

*Client: The recipient of the product from a project or "Other Work" for whom it is being undertaken; who will be responsible for product acceptance; and who will deploy the product, harvest the benefits and feedback results to the portfolio management function. PortfolioStep reserves the term "Client" for internal recipients of the product, i.e. those within the organization such as "Business Units" and internal departments.

*Component (of a Portfolio): See Portfolio Component.

*Customer: The person or group that commissioned the work; takes financial responsibility; and will be responsible for acceptance. PortfolioStep reserves the term "Customer" for external recipients of the work, i.e. those outside the organization and typically in a legal contract relationship.

*Deliverables: Physical items or measurable outputs that are identified as part of the project's product or objectives. Deliverables include intermediate products or services that are necessary for achieving the project's final results.

Determining Factors: Key descriptors of the portfolio such as component definition, category definition, key criteria definition, and resources capacity to support the portfolio management process. The determining factors are agreed upon by the executive group and are based on the organization strategic plan.

*Discretionary Work: "Other Work" of a minor project-like nature that can be included in the prioritizing and scheduling processes. Examples: bug fixes, minor enhancements and small process improvements.

Evaluation: The process of scoring specific potential components using key indicators and their related weighted criteria for comparison purpose for further decision making.

*Executive: That part of a whole organization or Business Unit responsible for governance and stewardship, i.e., strategic planning, administering and managing their entire organization. It includes such roles and responsibilities as administration, business development, finance, human resources, information technology, legal, marketing, portfolio management, and so on. For purposes of PortfolioStep, Project Management and Operations are considered as separate entities by virtue of their differing interests.

Filter: Criteria used to evaluate and select a potential component or to decide whether a component meets the stipulated go/no go conditions.

*Gap Analysis: An evaluation of the differences between what is and what could or should be, e.g. the difference between the current state and future vision of an organization. It is used to assess the amount of work involved in making the change.

*Governance: The exercise of authority, management and control through the planning, influencing and conducting of the policy and affairs of an organization, department or project.

Identification: The process of documenting and assembling, for further decision making, the inventory of ongoing and proposed new components as potential components for categorization.

Inventory: A set of components, comprising all active components as well as proposals for new components, properly documented using key descriptors, use as a basis for portfolio management decision-making.

*JAD Session: (Joint Application Development.) An interactive and structured group technique for eliciting and gaining consensus. The technique is applicable to such processes as requirements gathering and problem solving.

Key Criteria: Predetermined measures, values or conditions used in a scoring model to measure alignment with strategic goals.

Key Descriptors: A set of characteristics used to categorize and document a component for further decision-making. It might include among others, specifics about scope, schedule, budget, actual performance (using key performance indicators), class, category, evaluation scores, priority, and approval status.

Key Indicators: A set of parameters that permits visibility into how a component measures up to a given criterion.

Key Performance Indicators (KPIs): A set of parameters that permits measurement and reporting on the performance of the portfolio or of one of its components for further decision-making. Also known as Key Success Indicators (KSIs).

Management by Projects: The application of the project management discipline to achieve or extend an organization's strategic goals.

New Component: A component that is being added to an existing project portfolio.

*Operations: That part of the organization responsible for the on-going deployment of products and services and realizing the corresponding business benefits.

*Organization: The entire organizational structure including the Executive and its functional departments; Business Units (if any) and Operations; and Program and Project Management.

Organizational Governance: The process by which an organization directs and controls its operational and strategic activities, and by which the organization responds to the legitimate rights, expectations, and desires of its stakeholders.

*Other Work: "Work" that the organization has determined it will include in the PortfolioStep process because of its call on the PortfolioStep resources but that is not characterized as a program or project.

*Phase Gate: A key decision point for a go/no go decision established in the life span of a project, program, or sub-portfolio and required by management for purposes of assessing and controlling the expenditure of portfolio resources.

*Policies and Procedures: Policies are conveyed by a general statement of the manner in which the organization's business and activities are to be conducted. Procedures prescribe the specific steps for accomplishing these activities.

Portfolio: A collection of projects or programs and "Other Work" that are grouped together to facilitate effective management of that work to meet strategic business objectives. The projects or programs of the portfolio may not necessarily be interdependent or directly related.

Portfolio Balancing: The process of organizing the prioritized components into a component mix that has the best potential to collectively support and achieve strategic goals.

*Portfolio Component: Any "Work" that the organization has determined it will include in the PortfolioStep process. Such "Work" may be represented by the documentation of a Value Proposition; a Business Case; a Project Charter; Execution Performance Report; or similar document describing the value of the work, its status, its risk, and required resources.

*Portfolio Management: The centralized management of one or more portfolios that includes: setting up, identifying, selecting, prioritizing, authorizing, executing, and launching the portfolio components; and harvesting the optimum business benefits from the portfolio, and other related "Work", all consistent with the organization's strategic goals and objectives.

Portfolio Management Communication Plan: A plan defining all communication needs, establishing communication requirements, specifying frequency, and identifying recipients for information associated with the portfolio management process.

*Portfolio Management Life Cycle: A cycle of processes in the life of a portfolio the major phases of which are identification, selection, execution, harvesting the benefits and strategic change.

*Portfolio Management Team: Where an organization has more than one portfolio, the group of managers responsible for managing the whole portfolio of "Work". The makeup of this group depends on how the portfolios are defined or located within the organization.

*Portfolio Periodic Review and Reporting: The process of reviewing and reporting on the portfolio as a whole based on the performance and mix of the portfolio components, current projected cost and business value, risk level, and continuing strategic alignment.

*PortfolioStep Life Cycle: A cycle that consists of four major sequential phases or activities consisting of Prepare; Plan: Execute; and Harvest. These phases encompass the ten steps described in the PortfolioStep Portfolio Management Process. The harvesting activity refers to the reaping of the benefits, assessing their value and feeding the findings back into the preparation phase of the process, in order to establish continuous improvement, and thus completing the cycle.

*Potential Portfolio Component: Any "Work" that may be approved and authorized to be included in the PortfolioStep portfolio.

Prioritization: The process of ranking the selected components based on their evaluation scores and other management considerations.

Program: A group of related projects managed in a coordinated way to obtain benefits and control not available from managing them individually. Programs may include elements of related "Work" outside of the scope of the discrete projects in the program.

Program Management: The centralized coordinated management of a program to achieve the program's strategic objectives and benefits.

Program Management Office: The centralized management of a particular program or programs such that corporate benefit is realized by the sharing of resources, methodologies, tools, and techniques, and related high level project management focus.

*Project: A novel undertaking and systematic process to create a new product or service the delivery of which signals completion. Projects involve risk and are typically constrained by limited resources.

*Project Charter: A key document in the on-going life of a project or program approval of which provides the project manager with the authority to consume portfolio resources to execute the project within scope, quality, time, and cost constraints. An essential documentation required on medium and large projects and programs, with contents scaled accordingly, to provide the basis for selection and authorization of further expenditure of resources within the portfolio.

*Project Management: That part of an organization responsible for managing a project from inception to closure as evidenced by successful delivery and transfer of the project's product into the care, custody and control of the Client or Customer.

Project Manager: The person with the authority to manage the day-to-day work of the project. This includes leading the planning and development of all project deliverables and responsibility for managing budget, schedule and all project management procedures and processes. Project managers are stakeholders in the portfolio management process, and may provide assistance though they do not have a formal role.

*Project Size: In dealing with project work, it is useful to think in terms of size for purposes of matching the appropriate level of management "ceremony". What is "large" to one company may be "small" to another, and this also varies according to the type of project. The following list provides an indication of the project-sizing general used in TenStep products as they apply to the IT industry:

  • Support – Short-run, project-like non-discretionary work necessary to keep normal operational work going, e.g. a discrete task of, say, less than 25 man-hours

  • Small – A non-complex project involving a relatively small number of man-hours that has some discretion for prioritization, say, 25 to 250 man-hours

  • Medium – Probably where most projects fit, needs managing but not necessarily full-scale ceremony, say, 250 to 2,500 man-hours

  • Large – Projects requiring full-scale treatment on account of size and complexity, say, over 2,500 man-hours

  • Note that Programs can be similarly scaled to suit organizational requirements.

*Senior Management: See "Executive". May also be referred to as Upper Management, Management Team, or Management and Leadership.

*Scalability: PortfolioStep focuses on managing the work in a larger organization. However, portfolio management is not a trivial exercise and should be scaled to the size of the organization and the work involved, see "Project Size" for examples.

Scoring Model: A set of weighted criteria and corresponding key indicators to measure and score components for comparison and prioritization purposes.

Selection: The process of deciding on the components to be put forward from evaluation to prioritization based on their evaluation scores.

*Sponsor (Executive and Project): The person who puts forward project work during the Portfolio Selection process and has ultimate authority over the project if selected.

*Stakeholder: A person or group of people who have a vested interest in the success of an organization and the environment in which it operates.

*Steering Committee. A group of "Executive"-level clients and stakeholders who are responsible for providing portfolio strategic guidance, prioritization and approval of the "Work" for the portfolio and then monitoring the portfolio throughout the year. If new work comes up or if changes occur in the authorized workload, the Steering Committee determines the impact on the portfolio and adjusts accordingly.

Strategic Change: Any change in the strategic intentions and plans of the organization that can impact the contents of component definition, categories, filters, key indicators, and other decision making parameters used for portfolio management.

Strategic Goals: The definition of an organization's intended achievements in terms of business and cultural results, within a specified timeframe, and usually associated with specific metrics.

Strategic Plan: A high level document that explains the organization's vision and mission, plus the approach that will be adopted to achieve this mission and vision, including the specific goals and objectives to be achieved during the period covered by the document.

Sub-portfolio: A collection of components that includes programs, projects, portfolios and "Other Work" grouped together within a larger portfolio.

*Support Work: "Other Work" of an on-going service nature, rather than creating a deliverable, and typically requiring immediate attention such as recovery from a service failure.

*Value Proposition: A quick one-page document briefly describing a potential project or initiative and its justification. A very simplified form of Business Case and used for initial screening.

Weight: A multiplication factor used to convey the relative importance of key criteria used in a scoring model.

*Work: Any set of activities and associated resources, that the organization has determined it will include in the PortfolioStep process. Such work is not necessarily confined to programs and projects but may include direct "Support Work" activities necessary but too small to warrant project management procedures and document, and/or "Other Work" normally considered to be part of on-going operations but drawing on the same set of resources as those supporting the PortfolioStep process.

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